Blaustein office tower offered for $13.5 million

September 30, 1994|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

The Blaustein family's real estate arm has begun actively working to sell its namesake office tower downtown for the first time in its 31-year history, according to a package sent to potential investors this week.

The 25-story Blaustein Building is especially noteworthy because was one of the key elements that sparked Baltimore's downtown renaissance in the early 1960s.

American Trading Real Estate Properties Inc., the Blaustein-controlled real estate firm, is seeking $13.5 million for the 1 N. Charles St. tower, according to the confidential offering package, a copy of which was obtained by The Sun.

The 287,000-square-foot tower is the headquarters for Blaustein affiliates Crown Central Petroleum Corp. and American Trading & Production Corp., as well as the regional offices of accounting firm Ernst & Young and law firm McGuire, Woods Battle & Boothe. The building is 79 percent occupied and will generate $1.76 million in rental income this year.

"It's something we'll certainly look at, but it has to be priced right," said John W. Guinee III, managing director of Alex. Brown Kleinwort Benson Realty Advisors Corp., a local pension fund consultant with $2.8 billion in assets under management.

"And the simple reason is, we feel good about the long-term prospects for the Baltimore market."

American Trading, which retained commercial real estate services firm Colliers Pinkard for marketing, is also offering to sell its 16-story, 168,397-square-foot W. R. Grace Building at 10 E. Baltimore St., and the 796-space Downunder Parking garage beneath Hopkins Plaza.

Those two projects carry a combined asking price of $21.5 million. The Grace Building, completed in 1972, is 84 percent committed.

American Trading's efforts are part of a larger company plan to diversify its nationwide portfolio, which contains 25 buildings roughly totaling 2.5 million square feet. Office buildings represent 80 percent of the total.

In July, American Trading sold a 12-story office building in Tysons Corner, Va., for $14.6 million, its first major disposition. Any proceeds from the sale of the Baltimore properties are expected to be channeled into the acquisition plan.

In the past year, the company has acquired apartment complexes and industrial buildings in Charlotte, N.C., and Dallas as part of the diversification plan.

That the Blaustein family would be willing to part with its flagship property surprised some longtime local real estate observers, who recalled the Herculean effort to complete the project ahead lTC of the 23-story One Charles Center across Charles Street.

Completed in 1963, the Blaustein Building was viewed as a showcase of family patriarch and Amoco Oil Co. founder Jacob Blaustein's business success. At the time, the building cost roughly $8.1 million to construct, according to city documents.

"The Blaustein Building represents for the knowledgeable investor an opportunity to acquire a superbly located building with existing income," Pinkard wrote in the offering package.

Neither American Trading President Alan E. Kerry nor Colliers Pinkard officials would comment on the proposed sales.

Although the Blaustein offering comes at a time when vacancy rates have dipped and many analysts believe the downtown office market has stabilized, at least one potential buyer dismissed the possibility of investing here.

"We're not enamored with Baltimore," said Arthur P. Pasquarella, executive vice president of Berwind Properties Group Inc., a Philadelphia investor controlling a $400 million real estate portfolio.

"With no employment growth, there's no absorption of space, and therefore, no opportunity for rent growth. It's sort of like a food chain, and that's what we see there."

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